Former SFBC Director calls for higher capital requirements for UBS
Published: Tuesday, Dec 3rd 2024, 13:00
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The former Director of the Swiss Federal Banking Commission (SFBC), Daniel Zuberbühler, is calling for significantly higher capital requirements for UBS. This should make the "disastrous" scenario of the big bank being wound up somewhat less likely, writes the former top Swiss banking supervisor in a guest commentary in the NZZ on Tuesday.
In its report on banking stability from the spring, the Federal Council proposed correcting the "most obvious weakness" in the regulation of the big banks in response to the negative experience with CS. Even if this deserves full support as an "absolute minimum", the measures proposed by UBS and the Swiss Bankers Association (SBA) already go too far, according to Zuberbühler.
Equity ratio of 10 percent
The media debate had forgotten what further measures the Federal Council had rejected at the same time. For example, St. Gallen professor Manuel Ammann also called for an unweighted capital ratio (leverage ratio) of 10 percent. "Compared to the leverage ratio of 5.5 percent that applies to UBS at the end of 2026, this represents a substantial but moderate increase," writes Zuberbühler.
At the same time, the "relatively modest" progressive surcharges for global size and domestic market share should also be increased. According to Zuberbühler, this would give UBS an incentive not to grow too much or, in return, it would have to hold disproportionately more equity.
Doubts about settlement capability
The former SFBC director does not want to accept the argument that over 100 billion dollars in bail-in bonds are available in the event of an official resolution of the big bank. There are serious doubts as to whether a globally active, complex big bank like UBS can be wound up at all: "Winding up remains a high-risk experiment with an uncertain outcome."
Daniel Zuberbühler was Director of the Swiss Federal Banking Commission (SFBC) from 1996 to 2008 and in this role was involved in the rescue of UBS during the 2008 financial crisis. Following the merger of the SFBC with the Federal Office of Private Insurance (FOPI) and the Anti-Money Laundering Control Authority to form the Swiss Financial Market Supervisory Authority (FINMA) at the beginning of 2009, Zuberbühler was Vice Chairman of the Board of Directors of FINMA.
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